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Independent Speculator Bullion Buyers Guide

by Lobo Tiggre
Saturday, December 22, 12:00pm, UTC, 2018

I’ve written before about the time when owning bullion saved my family from dire need. That’s why I always look to buy gold when I want to sock away some savings. But what exactly do I mean when I say I’m buying gold?

First, let me make a related distinction. If I say I’m trading on gold (if it’s overbought or oversold and likely to move in the opposite direction), I’m usually talking about trading via an ETF, like the SPDR Gold Trust (GLD). This is a cheap and easy way to speculate on price movements in gold. This is a completely different thing from saving in gold, which has been the world’s #1 form of wealth protection for millennia.

So when I say I’m buying gold, I mean I’m buying physical gold. I mean gold that I can hold in my hand. I do not mean a paper substitute—even a very good one, like the Perth Mint Certificates. Nor would I count anything else with counterparty risk, like electronic gold in a pool account. I’m talking gold bullion in my direct possession.

Unfortunately, I’m not talking about so much wealth that I need to store and secure large numbers of 400-oz. gold bars. On the bright side, the gold bullion coins that are more my speed are usually beautiful works of art that are fun to collect. They cost little more than owning gold in someone else’s vault—with no counterparty risk—and they pack a lot of wealth into a very small space.

Okay, so, which are the best gold coins to buy?

Well, that’s like asking which is the best BBQ recipe in America. Everyone will swear by their favorites.

But there’s one more important distinction to make before making that choice.

As I’m sure you know, bullion coins are priced based on their metal content, while numismatic coins have additional value that collectors are willing to pay for. A current US gold eagle trades at spot plus a small premium for the coin manufacturing. An ancient Roman coin has a large numismatic value far in excess of whatever gold or silver it might contain.

There’s nothing wrong with this. I’m willing to pay for a small work of art wrought in precious metals, just as I’m willing to pay for a beautiful painting or sculpture.

The danger for collectors is that the numismatic value of collectable coins is notoriously fickle.

There are times when certain coins become all the rage. They don’t even have to be ancient, with obvious historical value. Their numismatic value multiplies the value of the contained metal—sometimes by a very high multiple.

There are also times when the reverse is true, and beautiful old coins trade for little more than a modern bullion coin with no numismatic value whatsoever.

What makes the difference? I couldn’t tell you. Economic booms help, but they alone are no guarantee. Even the most seasoned experts in the world can’t always tell you when the trends in numismatic value will peak, bottom, or remain unchanged. Dangerous waters indeed.

But there is one measurable, objective factor that makes all the difference.

When beautiful collectable coins are selling for little more than the cost of plain bullion coins, you get whatever upside there might be in higher numismatic value in the future—almost for free.

Of course, if I buy a collectable gold coin and the price of gold drops, the price I might get for my collectable coin would also drop. I’m not saying that numismatic value can protect anyone from fluctuations in metals prices.

I’m also not saying that savvy art collectors who love and specialize in coins shouldn’t brave the waters of higher-stakes numismatics. I just know that’s not me.

What I am saying is that when I’m bullish on precious metals and I’m looking to buy bullion, there’s no extra downside to checking to see what collectables might be selling at near-bullion prices. If I’m going to buy physical gold anyway, why not buy it in the form of a beautiful little sculpture that might be worth much more than the contained metal someday?

If that never happens, I’m no worse off. I still have the metal itself, which could once again save my family in case of dire need. And if it does… well, buying the collectable is like buying a super-cheap call option with no expiration date.

That’s a great deal.

 

Where do I Buy?

Personally, I’ve always enjoyed going down to my local coin shop and looking over what they have to offer. But they never have numismatics at near-bullion prices. Over many years of investing in and writing about precious metals, however, I have come to know what are, to my mind, the two most trustworthy players in the field:

  • David Hall Rare Coins. My friend Van Simmons at David Hall has a supply of US $20 Liberty gold coins, struck between 1849 and 1907—one of the most widely recognized gold collectables in the world. He also has a supply of the Saint Gaudens version, struck from 1907 to 1933. I asked Van to pass along any commission he might pay me as saving to my readers instead. In response, he’s offering these coins at 3.95% over spot gold, just for my readers. That’s less than my local coin shop used to charge for regular bullion coins. Note that this is as of December, 2018—premiums in the future will vary. For more info, please call Van at 800-759-7575. Tell him I sent you to make sure you get the discount.
     
  • Myles Franklin. My friend Andy Schectman at Miles Franklin has a limited supply of the 2016 0.99999 fine Canadian Grizzlies and the 2015 Canadian Cougar coins available. Most companies are selling these for between $85 and $100 over spot gold or more. Again, I asked Andy to skip paying me any commission and pass it along to my readers as a discount. He can offer us these coins at $49 over spot. Note again that this is as of December, 2018—premiums in the future will vary. If you’re interested, please call Andy at 800-255-1129. Let him know you’re one of my readers, and he’ll give you the special discount.
     

As for ordinary bullion coins, it’s hard to beat:

  • KitcoThis was perhaps the world’s first and largest online bullion dealer. Thanks to their tremendous volume, they can offer low premiums over spot. Many of my readers and I have done business with these people for decades, and we’ve never had a problem with them. Kitco does not have an affiliate program, and I’m not getting paid anything to mention them.
     
  • GoldSilver.comThis is a newer player in this space, but well established and very competitive. My former colleague Jeff Clark works for them, and he’s one of the most straightforward and honest people I’ve met. Notably, they have a low price guarantee, which applies even to Kitco prices. There is, however, a $25 shipping fee for orders less than $499.
    GoldSilver.com does have an affiliate program—but I asked them to pass the fee along to my readers as a discount, instead of paying me. With me taking no commission, you might be able to get bullion here at even cheaper prices than Kitco. To take advantage of this deal, you will need to enter the following code—exclusive for my readers—when you reach the checkout stage of your purchase: IS25BPS.

I want to stress that none of these companies are paying me to mention them. I do so because I’ve known them or their people for almost 15 years. In that time, I’ve not heard a single negative thing about their products, service, or prices. Not one.

Also, it just fits better with my whole business model if the only ones who pay me are my readers. You can consider me skipping any commission here as a “thank you for reading” gift to you.

Sincerely,

Think. Speculate.

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